aka ASO. A service wherein the client company outsources all elements of their employees’ payroll, insurance provision and other employment matters, but retains the role of legal employer (as opposed to Professional Employment Outsourcingwhere the legal employment is shared, or Global Employment Outsourcing where the legal employment is outsourced entirely).

An amount paid to a worker in addition to their regular remuneration, usually in recognition of an anticipated expense. Allowances are sometimes treated differently from regular salary and other incomes, so advance research is advisable.

A service sector dedicated to the specialist outsourcing of a client’s entire business unit. This may be carried out for cost purposes (when overseas, see also Offshoring) or to allow specialist tasks to be managed by a subject matter expert (see also Human Resources Outsourcing).

Often used to describe the relationship among two or more organisations that apply a level of control over the same worker or group of workers. Co-employers often share a degree of liability for shared employees. Additionally, see Professional Employment Outsourcing.

A set of regulations enforced for a particular sector, industry, union or other subset of workers. Collective agreements usually grant workers more rights, benefits or remuneration in exchange for added flexibility on working time, dangerous conditions, or other factors that other workers would not be exposed to.

Contingent work is usually used to describe any form of work that is not full-time direct employment. This workforce may be internal (fixed-term employees and temps) or external (contractors, agency workers, PEO employees).

A term used to describe situations where an external worker is deemed by the local authorities to be in a comparable role to an internal employee and therefore due the same rights and advantages as an internal employee despite the lack of a direct employment contract.

A written agreement, usually provided by the local tax authority, allowing an employer to treat a certain amount or category of income as non-taxable without providing further evidence of the incurred expense.

An agreement between two countries on how to tax individuals with tax liabilities in both countries so as to avoid the individual paying tax twice on the same income. In practice, this often dictates an order of priority for each type of income to determine which country may tax the individual first, with the other country then allowed to charge “top-up” rates in cases where their tax rates would prove higher.

A draw is in many ways similar to a loan to an employee, often used to pay a commission to a new employee in their first month, then earned back over time as the employee builds their commission. Caution must be used when implementing these internationally as many countries won’t allow the employer to recuperate any unearned funds previously paid to the employee at the end of the employment relationship.

Double Taxation Avoidance Treaty (DTT). An agreement between two countries on how to tax individuals with tax liabilities in both countries so as to avoid the individual paying tax twice on the same income. In practice, this often dictates an order of priority for each type of income to determine which country may tax the individual first, with the other country then allowed to charge “top-up” rates in cases where their tax rates would prove higher.

Often used interchangeably with Employer Social Security, employer costs is a broader term and is used to refer to all the costs relating to employment (salary, employer social security, additional statutory remuneration, etc.).

aka EOR. The company or department that is responsible for paying wages, tax, social security, etc.. Also used to describe a service, provided internationally, wherein the client company fully outsources the employment relationship (and associated risks) with all or some of their international employees. This service is often used to quickly explore a new market or territory without incorporating in-country right away. Also known as GEO and as International PEO.

Employer of Record (EOR).The company or department that is responsible for paying wages, tax, social security, etc.. Also used to describe a service, provided internationally, wherein the client company fully outsources the employment relationship (and associated risks) with all or some of their international employees. This service is often used to quickly explore a new market or territory without incorporating in-country right away. Also known as GEO and as International PEO.

A worker that is not affiliated with any single client, employer or agency, and is responsible for finding their own work and managing their own income. Although now often used interchangeably with Contractor, freelancers are more typically found in very short-term independent engagements such as graphic design, journalism and others.

A term used to describe a small, self-contained piece of work (a “gig”) and the ecosystem of companies, websites and workers that have grown up around it. Good examples include upwork.com, etsy.com, etc.

In many countries it is statutory or customary to pay workers additional remuneration either when they take Paid Time Off or every year in early summer, or both. In different countries such additional remuneration is variously termed Holiday allowance, Holiday pay, Holiday remuneration or Holiday bonus, and is distinct from the usual salary payment associated with Paid Time Off.

A type of Business Process Outsourcing specifically concerned with the outsourcing of the Human Resources function of an organisation either by engaging a vendor to manage HR operations or by allowing a vendor’s staff to be present at the client’s site to manage matters locally.

Independent Contractor Compliance (IO Compliance). Independent Contractor Compliance testing has arisen out of the need for tax and social authorities to distinguish reliably between true Independent Contractors and workers who claim the status only to benefit from the attractive rates it may come with. Each country has different tests in place, but most follow the logic of “command and control”, which dictates that a true Independent Contractor determines his own means and method whereas an employee will be told what to do and how by a superior.

An external worker brought in by a client under contract to provide services, usually billed on a time-related basis. Independent contractors are expected to work under their own supervision and in the manner they consider best, as opposed to a managed employee. Such contractors often benefit from beneficial and/or different tax and social security treatment, which has led to abuse and to authorities’ ever-increasing appetites for Independent Contractor Compliance testing. Contrast with Statement of Work consultant.

Independent Contractor Compliance testing has arisen out of the need for tax and social authorities to distinguish reliably between true Independent Contractors and workers who claim the status only to benefit from the attractive rates it may come with. Each country has different tests in place, but most follow the logic of “command and control”, which dictates that a true Independent Contractor determines his own means and method whereas an employee will be told what to do and how by a superior.

A type of contract where an intermediary is brought in solely to invoice the client and make payment to the worker. While this type of structure is often used to remain “at one step removed” from an independent worker or to pay a worker in a non-compliant manner, it is also legally used particularly where company policy prevents a client from making payments to a correctly-registered remote worker.

A term used in different ways in different countries. In the US more related with “laborers” such as agricultural and construction workers. In Europe Labour Leasing applies to most agencies who provide staffing services to a client.

In the UK, a one-man Limited company, aka a Personal Service Company or simply a Limited Company, is a single-person company commonly used by contractors as a tax-efficient invoicing vehicle for their contracting revenue.

A company that manages a client’s entire contingent workforce programme. Will often also manage the associated supply chain and provide consolidated reporting, billing, etc.. Most of these will offer a VMS platform to their clients to facilitate the relationship.

The demographic cohort that follows the Baby Boomer generation. Although there are no precise dates for when the Millennial generation starts or ends, demographers and researchers typically state birth years from the early 1980s to the early 2000s.

An optional, usually private, pension scheme which is put in place by the employer for the benefit of the employees. Employees may elect to pay additional contributions to the scheme, which the employer may match to a certain level.

The relocation of part of a client’s business, often finance or customer service, to a foreign market, usually for cost purposes. Note that offshoring does not necessarily mean the use of a foreign supplier; offshoring may be accomplished by the client opening a new office in a less costly location.

Time worked in addition to the agreed contractual hours. In many jurisdictions, and particularly for blue-collar workers, overtime is strictly defined and must be remunerated, often at a higher rate of pay and/or with time off in lieu.

In the first weeks or months of an employment contract, the employer and the employee may agree to a test or probation period with different terms from the remainder of the contract. Typically these differences include a shorter notice period and may include a slightly different remuneration structure.

A pension scheme which usually selected by the employee, who will also make most of the contributions. Such schemes are often completely independent of the source of the income and can be a very useful means of tax-efficiency for individuals for whom cash flow is not an immediate concern.

An amount paid to a worker in addition to their regular remuneration, usually in recognition of a hardship or an anticipated expense. Workers required to travel for work purposes may receive a per diem to cover their food and laundry costs, for example. While rules exist in many countries for the treatment of such income, the simple fact of calling an amount a per diem does not render the amount non-taxable: research into local rules and practices is always advisable (or call us!).

Professional Employment Outsourcing (PEO). A service, provided principally in the US, wherein the client company shares the employment relationship with an external employment company. This co-employment of the employee means that the PEO company takes on all the employment risks and bargaining power while the client company retains command and control of the employee.

A payment which takes place if the allocated holiday period has not been taken during the corresponding period, usually the end of a holiday counting period or the end of a contractual relationship. Note that Payment in lieu of holiday is illegal in employment relationships in many jurisdictions, where the employee must take the allotted amount of holiday.

aka PEO. A service, provided principally in the US, wherein the client company shares the employment relationship with an external employment company. This co-employment of the employee means that the PEO company takes on all the employment risks and bargaining power while the client company retains command and control of the employee.

A day which, at a local or national level, has been given similar status to a Sunday. Work on such days is therefore restricted and often subject to special conditions in terms of duration and remuneration.

The act of minimising, monitoring and controlling the probability and/or impact of negative events or losses. Risks from contingent employment can include the legal aspects of co-employment, resource risk, as well as the safety of human and physical resources.

A term used broadly (at times interchangeably with the Gig economy) to describe a service based on the sharing of a resource. Examples include Uber, Lyft, AirBnB and others. Typically very technology-driven and with very low barriers to entry, very useful for those seeking short-term stopgap income.

Remuneration due to an employee when absent due to illness or accident. In most countries employees’ entitlements are set by law, regulation or Collective convention, though employers may choose to be more generous.

A pension scheme which is usually run or regulated by the state. Often such schemes draw their contributions from the social security contributions, and the amount received after retirement may be disproportionate to the amount contributed.

aka SOW consultant. Used to describe an external worker providing services under a Statement of Work. In contrast with an Independent contractor providing services, the SOW contractor usually works to a specific goal or deliverable.

A company providing an “umbrella of employment” for day-rate contractors, particularly in the UK; taking the daily rate and putting it through PAYE to provide employment-like social advantages and legitimacy.

An accreditation delivered by a country to an individual confirming the individual’s right to enter, visit or reside in the country. A Visa does not automatically confer the right to work in the country. See also Work permit.

An accreditation delivered by a country to an individual confirming the individual’s right to work in the country under certain conditions. A Work permit does not automatically confer the right to reside or remain in the country, and an appropriate Visa is often required to gain access to and reside the country.

In the first weeks or months of an employment contract, the employer and the employee may agree to a test or probation period with different terms from the remainder of the contract. Typically these differences include a shorter notice period and may include a slightly different remuneration structure.

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